When Fox News host Chris Wallace asked Rex Tillerson on Sunday whether Donald Trump’s rhetoric about Charlottesville reflected American values, his response was terse: “The president speaks for himself.” The secretary of state had already been on deteriorating terms with the president, who has frequently undercut and overtaken his job. It was a clarifying moment for both men. With those five words, the former ExxonMobil chief drove a shaft of daylight between himself and the president, joining the ranks of other C.E.O.s who had repudiated Trump, and thrust his future at the State Department into uncertainty.

Tillerson has cut an unusually inconspicuous profile as America’s top diplomat. A reluctant secretary of state whose acceptance of the role was driven more by obligation than desire, Tillerson has relinquished authority on foreign policy and surrendered the spotlight to Jared Kushner, Trump’s son-in-law and top adviser, and Nikki Haley, the United States ambassador to the United Nations. But what began as a strategic calculation has become an embarrassing spectacle. “Tillerson was playing the long game . . . he was ceding a lot of ground to Kushner and Haley and thought it would pay off in the long run,” one current State Department staffer, speaking on the condition of anonymity, told me. “I think that he has seen that it has actually not paid off and it has made his job harder and I think Charlottesville was a turning point—but not for the reason that people think.”

Instead of leading the department’s international efforts, Tillerson has been focused on downsizing, working with consulting behemoths Deloitte and Insigniam to oversee a massive, top-to-bottom restructuring prompted by Trump’s calls to slash the agency’s budget. He has been criticized for isolating himself from veteran diplomats and concentrating decision-making in a tight-knit cadre of top advisers as dozens of critical ambassador and assistant undersecretary positions remain unfilled. While resentment builds at Foggy Bottom, Kushner and Haley have embarked on glory-hogging foreign-policy freelance projects.

A veteran of massive reorganizations at Exxon and the Boy Scouts of America, Tillerson is no stranger to the growing pains—or the media scrutiny—such overhauls can incite. But for Tillerson, Trump’s Charlottesville comments may have represented something else: a threat to his legacy. Had he still been C.E.O. of Exxon, he likely would have been among the business leaders who abandoned the president’s advisory councils in response to Trump’s claim that there were “very fine people” among the white nationalists protesting the removal of a Confederate statue. Instead, until Sunday, he remained silent while his corporate equals rebuked his boss. “The C.E.O.s that resigned from the different councils, that is actually Tillerson’s peer group . . . some of [whom] are his very close friends,” the current staffer said. “I think that kind of sunk in a little bit, like wait, history is going to judge legacies in the way that we respond to some of these big iconic events, right? And I think his response this weekend was emblematic of that . . . I think he thinks a lot about legacy, I think that is something that drives him.”

Late on Tuesday, the White House attempted to whitewash Tillerson’s remarks. “Certainly no one is distancing themselves from the president,” Press Secretary Sarah Huckabee Sanderstold reporters aboard Air Force One. But the State Department staffer disagreed, describing Tillerson as a leader whose patience with the administration is growing thin and is laying the groundwork for his exit after the reorganization is complete. “There are not a lot of ways to interpret that. I know people have tried to spin it but I thought that was a pretty blunt response. The secretary is straightforward,” the current staffer said of Tillerson’s response to Chris Wallace. “I always thought that he was going to leave anyway, and I think this probably accelerates it a little bit . . . I think that by early next year he is done.”

Tillerson’s response to Trump’s Charlottesville equivocation has drawn praise even among his harshest critics. “That’s what a secretary of state needs to do. They need to be a calming voice in times of chaos and concern,” Brett Bruen, a former foreign-service officer who also served as the White House director of global engagement under Barack Obama, told me. “While, certainly it didn’t win him any points with the West Wing, I think it was an important reminder for our allies and for our adversaries to bear in mind that the U.S. is more than one outlandish president.”

Bruen is certainly not wrong that Tillerson’s repudiation did not go over well in the White House, where the president reportedly “fumed privately” about his remarks. Less than 24 hours later, Axios’s Mike Allenreported on the possibility of the former oil exec’s ouster. Noting the president’s mounting frustration, Allen floated a musical-chairs style staffing shake-up that would see Haley taking over the State Department and send Dina Powell, currently the deputy national security adviser, to New York City to serve as ambassador to the U.N.

This soap-operatic reshuffle makes a surprising amount of sense to several diplomats I spoke with. To start with, hiring from outside has become a large problem in the Trump administration. “The president is going to have tremendous trouble finding qualified people to fill current and possibly future vacancies. When you have to disband a voluntary business advisory council because business and community leaders are embarrassed to be associated with you, it’s a pretty good indication that finding talent to leave their job and work for you is going to be tough,” Terry Sullivan, a top G.O.P. political consultant who worked on Marco Rubio’s 2016 campaign, told me. “I personally have résumés of numerous people working in the administration looking to get out. There aren’t very many people who are proud to be there right now . . . He now needs these folks a lot more than they need him.”

Haley and Powell, meanwhile, are standouts in an administration with precious few success stories. “Nikki Haley has clearly carved out a public persona that is greater than the role of U.N. ambassador,” Bruen told me. “She has been one of the more rational and reliable voices on U.S. foreign policy, even eclipsing Tillerson in many respects and so it would seem like a natural fit for her to take on a title and a position that is commensurate with the public persona that she has created.”

Haley has managed to strike a balance between advocating for human rights—and for her own policy views—while stopping short of positioning herself in opposition to Trump’s agenda. In Jordan and Turkey in May, Haley posed for pictures with refugees, assuring those displaced by the enduring conflict in Syria that the Trump administration would not give up on them—while highlighting that the refugees wanted to go home, not come to the U.S. In the wake of Charlottesville, the former South Carolina governor, who’d risen to national prominence for her handling of the state’s Confederate flag controversy after the 2015 Charleston church massacre, neatly sidestepped the fallout, telling the press that she’d had a “private conversation” with the president to express her misgivings.

And as Tillerson has spurned the foreign service and the bureaucrats at Foggy Bottom, Haley has embraced their ranks. I am told that Haley makes a point to conduct meet-and-greets with staff when she visits embassies abroad, taking questions and giving morale boosting speeches—something Tillerson has avoided—almost as though she is campaigning for the job. “She gets along well with people and appears to be comfortable relying on both foreign service and political staff,” one recently departed career foreign-service officer, who is still in touch with diplomats, said of Haley.

While Haley’s foreign-policy résumé essentially begins and ends with her tenure at the U.N., the current State Department staffer suggested her dearth of expertise might be less consequential than in past administrations. “I think most people don’t think she has enough experience but given the rest of this administration and the way that the picks are happening . . . I think she would be more well-received in comparison, because they realize that some of the other Cabinet members they don’t seem super competent or not that strong,” the staffer said.

In the West Wing, Dina Powell has often been seen as aligned with Gary Cohn, her former boss at Goldman Sachs, where she was a partner. And while some snipe that she didn’t actually work in the trenches at the finance behemoth (she was known by some around the firm as “content lite”), she has her own foreign-policy credentials, having held a handful of positions at the State Department during the George W. Bush administration. Several diplomats I spoke to thought Powell would be well-received as ambassador to the U.N. “Dina Powell is a very strong leader. She really needs to be more visible at this time when there is such instability in the U.S. position,” Bruen said. The current State staffer told me she has “a lot of respect across the board,” is “well-liked and her policy chops are really strong.”

Still, Powell has other, dark forces working against her. At the U.N., she would not only be confronting North Korea and Iran, but also in all likelihood Steve Bannon, with whom she clashed while he was in the White House. Powell originally joined the Trump administration to work with Ivanka Trump on women’s empowerment issues, but was quickly tapped by National Security Adviser H.R. McMaster to serve on his team, joining an informal alliance of so-called “globalists” that Bannon and his nationalist allies have vowed to destroy. With Bannon back at Breitbart, Powell could face a concerted right-wing media campaign against her ascension—even despite her reputation as a strong conservative with roots in Republican politics.

Throughout her tenure in the White House, Powell has managed to avoid the same level of scrutiny as some of her West Wing colleagues. This, according to the current staffer, is by design: one of her skills is a kind of bureaucratic stealth. “The thing about Dina is she is super smart about not being too public . . . she’s kind of kept her head down and she has been super careful about not [taking sides],” this person told me. “She is just really, really smart about it.” As a public-facing diplomat at the U.N., the scrutiny would be harder to avoid. One former Obama administration official identified Powell as “clearly among the shining lights of the Trump administration’s foreign-policy apparatus,” but noted, “the bar is exceedingly low.”